A former executive for Bud Light responded after billionaire Bill Gates’ foundation purchased nearly $100 million shares in the beer giant as the company continues to face a months-long boycott, calling the decision a “mistake.”
“Bill Gates is definitely making a mistake,” said Anson Frericks, a former Anheuser-Busch executive in an interview with Fox Business this week. “Earlier this year, he already made a $900 million mistake when he invested into one of Anheuser-Busch’s largest rivals, Heineken. He did that earlier this year. And since that investment, Heineken’s down about 10 percent, whereas the broader markets are up 10 percent.”
A recent regulatory filing revealed that the Bill and Melinda Gates Foundation Trust, which Gates helped co-found alongside his ex-wife, purchased about 1.7 million shares of Anheuser-Busch InBev, which owns Bud Light, for about $95 million in the last quarter. Gates has not issued a public comment about the purchase.
“So if I was looking for advice on investing to software companies, tech companies, I might go to Bill Gates. But if you’re looking at the beer industry, he doesn’t have a great track record of investing in winners at this point,” Frericks, who has been critical of Bud Light, said on Wednesday.
Anheuser-Busch’s American division saw about a 10% decline in profits in the second quarter, following a boycott initiated in April, when Bud Light made a now-infamous promotional package for transgender activist Dylan Mulvaney. Afterwards, many conservatives began calling for action against the company, which lost its top spot to Modelo Especial earlier this year.
As of Aug. 19, sales volumes of Bud Light at off-premise locations like grocery stores fell by 20.1% so far this year, as compared to the same period last year, according to Nielsen IQ sales data via Bump Williams Consulting.
It’s not clear whether Anheuser-Busch InBev or its distributors will need to make “structural changes,” according to some analysts, but several weeks ago, Anheuser-Busch confirmed that it has laid off approximately 300 of its corporate employees in the midst of the backlash.
“Continued weakness begs the question of whether Anheuser-Busch InBev and/or its distributors will have to make significant structural changes to reduce their cost basis if trends don’t improve over the next few months,” Evercore ISI analyst Robert Ottenstein wrote in a recent note, Yahoo Finance recently reported.
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